Look for a typically quiet Monday with cattle buyers limiting efforts to the collection of new showlists. We expect the early-month offering be about steady with last week. Significant trade volume is not likely to develop until after the July Fourth break. Live and feeder futures are set to open moderately higher, supported by follow-through buying and live sales as high as $108 on Friday.

Hog buyers should resume work Monday with bids steady to $1 lower. Lean futures are expected to begin on a mixed basis as traders continue to translate the supply implications on June 1 Hogs & Pigs into price expectations. That probably means a further deepening of deferred discounts. On the other hand, the weight breakdown of market hogs released last week hints that we could be close to a seasonal low in ready barrows and gilts.

BULL SIDE

BEAR SIDE

1)

Cattle buyers will start this holiday-shortened week with a longer shopping list, charged with the necessity to secure slaughter needs for the first full production week of July.

1)

It would appear the dog days of demand are already barking at the wholesale beef market. From Friday to Friday last week, the choice and select cutouts lost as much as $5.20 and $3.45, respectively. Furthermore, retailers and food managers will be slow to reload this week until they can assess holiday clearance.

2)

Live and feeder futures exploded higher on Friday with new spot August live closing above its 100-day moving average for the first time since March 5. A move above 107.65 basis August could trigger more short-covering and technical buying.

2)

Trade war complications continue to increase in terms of retaliatory tariffs imposed on U.S. goods by trading partners around the world. Canada released a long list of U.S. products to be taxed, including beef (see article below).

3)

Though deferred lean hog futures clearly reacted negatively in the immediate wake of the bearish Hogs & Pigs report, most contracts did manage to close 100 points or more above session lows.

3)

Despite the strong growth rate and the fears of the trade war, pork producers have indicated an intent to farrow more sows over this current quarter, as well as the September to November period. This suggests that record pig crops are likely the remaining two cycles of 2018 and perhaps even for first quarter of 2019.

4)

The seasonal trend is for August lean hog futures to trade higher over the next several weeks.

4)

For the reporting week ending June 26, noncommercial traders increased their net-short position in lean hog futures by 2,900 contracts, which now stands net-short 20,000.

OTHER MARKET SENSITIVE NEWS:

CATTLE: (CNBC) -- U.S. farmers and food producers are in the crosshairs of a global trade conflict that shows no signs of abating anytime soon -- and things are about to escalate in a big way on Sunday.

New tariffs will be imposed by Canada on beef, and more retaliation will come this week when China and Mexico take aim at pork. China's also planning a 25 percent tariff on soybeans on July 6 in addition to hikes on pork duties, and Mexico's 20 percent levy on "the other white meat" is set to begin July 5.

Meanwhile, the European Union's initial duties worth $3.2 billion took effect June 22. Most of the duties amount to 25 percent, and include a variety of U.S. products, including motorcycles, boats, whiskey and peanut butter. All three U.S. allies announced new tariffs in response to the Trump administration's decision to impose levies on imported steel and aluminum products for "national security" reasons.

Separately, China is preparing to unleash a wave of new tariffs of 25 percent on 545 U.S. products valued at $34 billion, including soybeans and some dairy products. The duties become effective July 6, with U.S. autos also a target of Chinese import duties.

For Canada, tariffs of 10 percent are being imposed on about $12.5 billion worth of U.S. products. Starting Sunday, a wide range of U.S. staples will be hit, including chocolate, ketchup, yogurt, beef, caffeinated roasted coffee, orange juice, maple syrup, salad dressing and soups.

Dairy is one of the sticking points between the U.S. and Canada in renegotiation of NAFTA, the North American Free Trade Agreement -- but it's probably not the reason Ottawa selected yogurt for tariffs. Instead, it may have been done to get the attention of House Speaker and Wisconsin Republican Paul Ryan. Canadian imports of yogurt from the U.S. totaled a mere $3 million last year, and mostly came from a plant located in Wisconsin.

Also, by selecting soups the Canadian government may have had a message for New Jersey-based Campbell Soup, which in January announced plans to halt production of soup and broth in Canada and cut about 380 jobs. Campbell did not immediately respond to CNBC's request for comment.

Ottawa released a final list of products facing tariffs on Friday, and it included some new products such as pillows but removed mustard. Ketchup stayed on the final list along with toilet paper and whiskey.

Kraft Heinz's ketchup is the market share leader in Canada but the U.S.-based company closed a factory in Leamington, Ontario back in 2014 and trimmed more than 700 jobs. French's, the mustard maker, sells Canadian-made ketchup, in a partnership with Toronto-based Select Foods Products.

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"As a global food company, Kraft Heinz opposes trade policies that impose taxes or tariffs on our products," company spokesman Michael Mullen said in an emailed statement to CNBC. "NAFTA has been in place for more than 20 years and we have developed supply chains that run across North America."

American exports of sauces and condiment products to Canada totaled approximately $650 million last year, according to data from analytics firm WiserTrade. The U.S. sold about $55 million in whiskey to Canada in 2017.

About 95 percent of the products on Beijing's target list are from agriculture or food sectors, including soybeans -- one of the most critical exports in the U.S. farm economy.

Farmers have been bracing for the consequences of soybean tariffs, since it could hammer a lucrative export market, reduce profits and have ripple effects across the rural economy. The U.S. could see an economic loss of $3 billion from the soybean tariffs, according to Purdue University estimates.

China buys about half of the U.S. soybean exports, or about $14 billion annually, and roughly one in three rows of soybeans grown on the nation's farms goes to the world's second-largest economy, according to the American Soybean Association.

"It really puts us with a big 'bull's eye' on our back, you might say, because agriculture is usually and first and the easiest to implement (tariffs) and to get everyone's attention -- and they're sure doing that," said soybean farmer Richard Guebert Jr., president of the Illinois Farm Bureau.

China's tariff action is in response to the White House's announcement on June 15 to slap 25 percent duties on Chinese goods, mostly on items from aerospace, robotics and machinery industries. The bulk of those duties, or about $34 billion worth of imports from China, will see levies collected starting on July 6.

Besides soybeans, China's new tariffs impact pork, wheat, rice and dairy, as well as a variety of fruit and vegetable products. One in 4 hogs in the U.S. is sold overseas, and the Chinese are the world's top consumers of pork.

"We do feel like we're getting kicked in the shin and in the elbow all at the same time," said Joe Steinkamp, who grows soybeans and corn in southern Indiana. "Farmers need that export market, and if we don't have it then they will suffer and rural communities are going to suffer."

At about $1.1 billion, mainland China and Hong Kong together are among the top export markets for U.S. pork based on value, according to the U.S. Meat Foundation. Last year, China was the second-largest volume market for American pork, after Mexico.

Experts say by targeting high-value U.S. farm exports such as soybeans and pork with punitive tariffs, China was sending a message to President Donald Trump, since the two farm products are primarily from Midwestern states that helped him win the 2016 election.

"They are clearly designed to hit back at the heartland of America, and raise the costs of agricultural farm exports to China that will reduce consumption in China and force them to look for alternatives," said Robert Holleyman, a former senior trade official during the Obama administration and now president of C&M International, a Washington consulting firm.

In the case of pork, the retaliation is especially painful for American farmers, and shows just how brutal the trade tussle has become between Beijing and Washington. The pork industry still is reeling from 25 percent tariffs China imposed back on April 2.

"Pork products into China could start to take an immediate hit," said David Salmonsen, senior director of government relations at the American Farm Bureau Federation, the nation's largest farm organization. "We'll see how much but they will have a pretty high tariff for getting into that market.

China's additional levies also apply to various seafood products, including salmon, tuna, shark fins, crab, shrimp and lobster. The U.S. exported more than $1.3 billion worth of seafood to China in 2017, with Maine lobster alone accounting for more than $90 million of that amount last year.

As for Mexico, the country responded to Trump's steel and aluminum tariffs in early June by announcing penalties on more than a dozen agricultural products, including a planned 20 percent duty on pork. Mexico slapped unprocessed pork with an initial 10 percent tariff on June 5: That increases to 20 percent effective

More than $1 billion in U.S. pork products were exported to Mexico last year. U.S. pork hams are top sellers in Mexico, but friction over the border wall and renegotiation of NAFTA has led Mexico to look elsewhere for key agricultural and good products, including pork, soybeans and corn.

Mexico also is a major buyer of U.S. dairy products such as cheese. U.S. cheese exports will face new tariffs of 20 percent to 25 percent tariffs effective July 5, an increase from the current 10 to 15 percent levies in place since June 5.

Overall, Mexico's tariffs announced in June cover $3 billion worth of American goods. Mexico and Canada together represent nearly one-third of total U.S. agricultural exports.

According to Reuters, Mexico has been studying additional tariffs that could be even more painful for American farmers, including levies on U.S. corn and soybeans. Mexico was the top export market for U.S. corn last year.

Corn exports to Mexico were valued at more than $2.3 billion in the most recent year, and soybean sales topped $1 billion.

Continental Europe has also has weighed in with its own set of tariffs in response to the White House's duties on imported steel and aluminum.

The EU tariffs that were implemented June 22 apply to about 180 different products, or about $3.4 billion worth of American goods.

The products with import duties of 25 percent include motorbikes, jeans, boats and whiskey, as well as well as agricultural products like sweet corn, rice, tobacco, peanut butter and orange juice.

As a result of the EU action, Wisconsin-based motorcycle manufacturer Harley-Davidson announced it would move some of its production overseas. The iconic American company's decision to relocate some production outside the U.S. didn't sit well with Trump. He tweeted: "I've done so much for you, and then this."

HOGS: (AP) -- A federal jury on Friday punished the world's largest pork producer, deciding Smithfield Foods should pay two neighbors more than $25 million for unreasonable nuisances they suffered from odors, flies and rumbling trucks after an industrial-scale hog grower expanded near their home.

The case, which was supposed to be one of the most favorable to Smithfield Foods out of dozens of similar pending lawsuits in North Carolina, turned out worse for the company than a previous lawsuit that rocked agribusiness in the country's No. 2 pork-producing state.

That earlier case, selected by lawyers for more than 500 neighbors who are suing industrial-scale hog farms in eastern North Carolina, ended in April with jurors awarding 10 neighbors $51 million for nuisances they'd long tolerated. The fine was cut to about $3 million because North Carolina law limits punitive damages. Friday's damages are also expected to be slashed.

Still, the April verdict led North Carolina legislators to pass a law this week erecting new barriers against nuisance lawsuits that all but eliminate the right of neighbors to sue Smithfield Foods, its contract growers or any other agribusiness. The legislation was needed "to save every farmer in this state from frivolous lawsuits," said bill sponsor Sen. Brent Jackson, an agribusiness founder and Republican who represents three counties in what is the country's heaviest concentration of industrialized hog lots.

Critics billed the legislation as an attack on private property rights in order to protect a well-heeled industry. The law adopted over a veto by Gov. Roy Cooper will be followed by demands for similar protection by other special interests, said Republican Rep. John Blust, an attorney from suburban Greensboro.

"This is like the first domino to fall," he said.

Smithfield declined to comment Friday, citing a judge's gag order meant to limit pre-trial publicity ahead of the next trials. More than a half-dozen lawsuits are scheduled for trial this year attacking Virginia-based Smithfield for its open-pit waste handling methods.

The lawsuits target the hog-production division of Smithfield -- not the farm operators -- because plaintiffs' lawyers said the company used strict contracts to dictate how farmers raise livestock that Smithfield owns. Smithfield is owned by Hong Kong-headquartered WH Group, which posted profits of about $1 billion last year.

Despite decades of complaints from neighbors and environmentalists, the predominant method of handling hog waste in North Carolina is collecting it in open-air pits that are emptied by spraying liquid excrement on farm fields.

Smithfield has continued using the low-cost method because it helps the company produce pork for less than in China, lawyers for the neighbors said. Smithfield began covering its waste pits on Missouri farms to reduce odors under pressure from that state's attorney general more than a decade ago. Smithfield and pork trade groups counter that no alternative method -- including covering cesspools for odor control or drying and trucking away manure -- is economically viable in North Carolina. And anyway, Smithfield hog farms don't smell, the company's lawyers and allies said. The plaintiffs dispute the assertion.

Livestock owners' fears that they could be shut down by nuisance lawsuits were heightened after Smithfield's earlier courtroom loss. The company told farm operator William Kinlaw last month that he breached his contract with the pork giant that required him to control odors and "maintain proper sanitation." The company removed its revenue-producing hogs from the farm.

But "Smithfield has decided to provide him with some temporary financial assistance pending appeal" of its court loss, company spokeswoman Keira Lombardo said in an email this week. She said Smithfield would not discuss how much it is spending or whether it is keeping Kinlaw's business afloat. Kinlaw did not have a listed phone number and could not be reached for comment.

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